Ambitious governors dominate tax debate

Looking for the next big tax debate? Talk to a governor — preferably one with presidential ambitions.

From Louisiana to New York, and Wisconsin to Massachusetts, some of the nation’s most prominent governors in both parties — more than a few of whom have grander aspirations — are using their megaphones to propose bold state tax initiatives.

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And while they may be moving in different directions, they have one thing in common: their proposals cater to more than just a local audience.

Gov. Bobby Jindal, who is flirting with a 2016 presidential run, recently proposed scrapping Louisiana’s income and corporate taxes.

His tax plan will play nicely with conservatives across the nation, simultaneously serving his political ambitions.

“Across the county there are people who are trying to make a name for themselves,” Grover Norquist, president of the conservative Americans for Tax Reform, told POLITICO. “It’s the right thing for the state, but it has the added advantage of being a political advertisement for somebody who may be a potential presidential candidate at the national level.”

Think of the state as a résumé-builder, and governors’ tax proposals as their credentials — particularly for Republicans.

Norquist and other national-level tax advocates on both sides of the aisle are watching closely.

“It seems pretty clear that a lot of governors are proposing anti-tax measures to burnish their credentials with Republican voters,” said Matthew Gardner, executive director at the left-tilting Institute on Taxation and Economic Policy. “The tea party adherents are going to want to hear tax-cut stories from any electoral candidate.”

More broadly, the myriad plans underscore how the national debate over taxes is quickly shifting to state capitals, after the fiscal cliff left tax reform plans in limbo.

Just Tuesday, Norquist launched a campaign against Virginia Gov. Bob McDonnell’s plan to hike the state’s sales tax from 5 percent to 5.8 percent. Although it also abolishes the 17.5-cent gas tax, the changes net about $2.4 billion more into the Old Dominion’s coffers over five years — a far cry from the governor’s goal of “revenue neutrality.”